Question

State whether the Partner's capital account is debited to record the gain of revaluation account.

Answer 1

The partner's capital account is credited to record the gain of the revaluation account. The revaluation account is credited with an increase in the assets and a decrease in the liabilities since it is a gain. It is debited with the decrease in the assets and an increase in the liabilities since it is a loss. When the credit side is greater than the debit, there is a profit on revaluation which is credited to the partner's capitals accounts in their old profit sharing ratio.

The accounting entry is:

Profit on revaluation a/c.... Dr

To Partner's Capital a/c